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70-494 dumps

During a routine audit of a customer service hotline, an internal auditor noticed that an unusually high number of customer complaints pertained to payments not being applied to the customers’ accounts. Which of the following would most likely be the reason for the high volume of complaints?
A. An ineffective customer service department.
B. Poor controls in the invoice approval processes.
C. Check tampering by an employee.
D. Submission of fraudulent expense reports.
70-494 exam Correct Answer: C
Direct staff as a percentage of total staff is an example of which of the following types of efficiency measures?
A. Productivity ratio.

B. Productivity index.
C. Operating ratio.
D. Resource utilization rate.
Correct Answer: C
Which of the following data collection strategies systematically tests the effects of various factors on an outcome?
A. Content analysis.
B. Sampling.
C. Evaluation synthesis.
D. Modeling.
70-494 dumps Correct Answer: D
Which of the following audit procedures is most suitable for verifying that all sales transactions have been recorded?
A. Observation.
B. Tracing.
C. Re-computation.
D. Vouching.
Correct Answer: B
Which of the following would be an appropriate and effective control self-assessment approach in an organization with an authoritative culture?
I. Facilitated meeting
II. Survey
III. Management-produced analysis
A. I only
B. I and III only
C. II and III only
D. I, II, and III
70-494 pdf Correct Answer: C
A film company determined that income level impacts the number of films that people watch per month, as shown by the graph below:
The graph indicates that:
A. A richer person always sees more films than a poorer person.
B. The number of films seen per month is a linear function of income level.
C. A 20 percent pay increase is more likely to increase film viewing at lower income levels than at higher income levels.
D. A 20 percent pay increase is likely to increase film viewing by a constant amount regardless of income level.
Correct Answer: C
What does the following scatter gram suggest?
A. Sales revenue is related to training costs.
B. The training program is not effective.
C. Increases in training costs consistently increase sales revenue.
D. One data point is incorrectly plotted.
70-494 vce Correct Answer: A
New credit policies have been implemented in an automated order-entry system to improve the collection of receivables. Sales management has compiled several examples that show decreased sales and delayed order entry, and contends that these examples are a direct result of the new credit-policy constraints. Sales management’s data and information provide.
A. Feedback control data.
B. Irrelevant and argumentative information.
C. Evidence that the new credit policies do not meet the stated corporate objective to improve collections.
D. A statistically valid conclusion about the impact of the new credit policies on customer goodwill.
Correct Answer: A
If an organization’s chief audit executive wants to implement continuous auditing, what is the appropriate order in which key steps should be undertaken?
I. Identify business applications that require access.
II. Implement steps to continuously assess risks and controls.
III. Define objectives of continuous auditing.
IV. Manage and report results.
A. III, I, IV, II.
B. II, I, III, IV.
C. III, I, II, IV.
D. II, III, I, IV.
70-494 exam Correct Answer: C
In which of the following situations would it be most appropriate to employ the services of a forensic specialist?
A. Detection of unauthorized changes to source documents.
B. Review for misapplication of general computer controls over accounts receivable.
C. Investigation of ghost employees in a large business.
D. Verification of fixed assets in a manufacturing company.
Correct Answer: A
The following is an excerpt from an audit engagement workpaper:
A Company
Accounts Receivable
Objective. To determine if the computer system is correctly recording all accounts receivable transactions. Procedures: Judgmental selection of a sample of all accounts receivable balances greater than $50,000 for positive confirmation of balances.
Conclusion: Based on the results of testing wherein all but three confirmations were returned, the accounts receivable balance is fairly presented in all material respects.
Which of the following is true regarding the workpaper?
A. It is not appropriate to judgmentally select a sample when testing accounts receivable.
B. A conclusion should be reached only for the results of overall testing, not for individual procedures.
C. The audit procedures used are not consistent with the audit objective.
D. The format of the workpaper does not conform to the standard format for workpapers.
70-494 dumps Correct Answer: C
Which of the following trends found on financial reports would most likely indicate a possible problem?
A. A material decrease in the receivables turnover.
B. A material increase in inventory turnover.
C. A material increase in daily sales compared to total outstanding receivables.
D. A material increase in the acid-test ratio.
Correct Answer: A
Which of the following situations would best support the decision of a chief audit executive (CAE) to defer follow-up activity at a branch office until the next audit engagement?
A. An audit of the branch office is routinely scheduled every three years.
B. On-site follow-up of a remote branch may not be feasible due to travel costs.
C. Branch office management states that correction of the audit issue may take longer than expected.
D. The CAE and management agree that the corrective action taken to date is sufficient.
70-494 pdf Correct Answer: D
When conducting research, which of the following is most important?
A. Using computer databases or the Internet to find all relevant sources.
B. Providing documentation of the reference sources.
C. Presenting only those facts that support the conclusion.
D. Presenting all contrary views to balance the opinion.
Correct Answer: B
Productivity statistics are provided quarterly to a company’s board of directors. An auditor checked the ratios and other statistics in the four most recent reports. The auditor used scratch paper and copies of the board reports to verify the accuracy of computations and compared the data used in the computations with supporting documents. The auditor wrote a note describing this work for the workpapers and then discarded the scratch paper and report copies. The auditor’s note stated. “The ratios and other statistics in the quarterly board reports were checked for the last four quarters, and
appropriate supporting documents were examined. All amounts appear to be appropriate.”
In this situation:
A. Four quarters is not a large enough sample on which to base a conclusion.
B. The auditor’s workpapers are not sufficient to facilitate an efficient review of the auditor’s work.
C. The auditor should have included the scratch paper in the workpapers.
D. The auditor should have considered whether the information in the board report was compiled
70-494 vce Correct Answer: B
Which of the following is an example of the verification of internal documentary evidence?
A. Reviewing a carrier’s bill of lading.
B. Reconciling a vendor’s month-end statement.
C. Vouching a copy of a sales invoice to receivables.
D. Recalculating a customer’s purchase order.
Correct Answer: C
The balanced scorecard approach differs from traditional performance measurement approaches because it adds which of the following measures?
I. Financial measures.
II. Internal business process measures.
III. Client satisfaction measures.
IV. Innovation and learning measures.
A. I only
B. II and IV only
C. III and IV only
D. II, III, and IV only
70-494 exam Correct Answer: D
An auditor prepared a workpaper that consisted of a list of employee names and identification numbers as well as the following statement:
“A statistical sample of 40 employee personnel files was selected to verify that they contain all documents required by company policy 501 (copy attached). No exceptions were noted.” The auditor did not place any audit verification symbols on this workpaper. Which of the following changes would most improve the auditor’s workpaper?
A. Use of audit verification symbols to show that each file was examined.
B. Removal of the employee names to protect their confidentiality.
C. Justification for the sample size.
D. Listing of the actual documents examined for each employee.
Correct Answer: C
During an interview with a manager in a company’s claims department, an auditor noted that the manager became nervous and changed the subject whenever the auditor raised questions about certain types of claims. The manager’s answers were consistent with company policies and procedures. When documenting the interview, the auditor should:
A. Document the manager’s answers, noting the nature of the nonverbal communication.
B. Document the manager’s answers but not the nonverbal communication because it is subjective and is not corroborated.
C. Conclude that the nonverbal communication is persuasive and that sufficient evidence exists to begin a fraud investigation.
D. Disregard the interview entirely because the verbal and nonverbal communications were contradictory.

70-494 dumps Correct Answer: A
Which of the following is true of engagement recommendations?
I. Specific suggestions for implementation must be included.
II. The internal auditor’s observations and conclusions may serve as the basis.
III. Actions to correct existing conditions or improve operations may be included.
IV. Approaches to correcting or enhancing performance may be suggested.
A. I only
B. III only
C. I, III, and IV only
D. II, III, and IV only
Correct Answer: D
Which of the following performance criteria would be most useful when measuring the performance of a customer service desk?
A. The number of customer inquiries recorded per day.
B. The percentage of customer issues resolved within 24 hours.
C. The number of customer complaints recorded per day.
D. The percentage of total customers served per day.
70-494 pdf Correct Answer: B
The efficiency of internal audit operations is best enhanced if workpaper standards:
A. Permit the extent of documentation to vary according to engagement objectives.
B. Require supervisors to initial and date each workpaper that they review.
C. Allow access to workpapers by external parties if approved by senior management or the audit committee.
D. Mandate the workpaper retention period.
Correct Answer: A
According to the International Professional Practices Framework, which of the following statements is correct regarding the communication of audit results?
I. Summary reports may be issued separately from or in conjunction with the final report.
II. Interim reports may be written or oral.
III. Detailed reports should always be issued to the audit committee.
IV. Interim reports should be used to communicate information which requires immediate attention.
A. I and III only
B. II and IV only
C. I, II, and IV only
D. I, II, III, and IV.
70-494 vce Correct Answer: C
The chief audit executive (CAE) determined that based on management’s oral response, the action taken regarding an audit observation was sufficient when weighted against the relative importance of the audit recommendation. Which of the following is the most appropriate step for the internal auditor to take next?
A. Initiate a follow-up audit to ensure that action has really been taken.
B. Follow-up with management until a written response is obtained.
C. Escalate the issue to the board and get their position on the issue.
D. Note in the permanent file that follow-up needs to be performed as part of the next engagement.
Correct Answer: D
Which of the following will be an appropriate course of action when an auditor disagrees with a client about a well documented audit finding?
A. Include both the audit finding and the client’s position in the audit report.
B. Defer reporting the item and plan to perform more detailed work during the next audit.
C. Change the finding so that it is acceptable to the client.
D. Address the issue with senior management and the board for resolution prior to issuing the final report.
70-494 exam Correct Answer: A

70-494 dumps

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